ice-fili roll no. 29

8/8/2019 Ice-Fili Roll No. 29

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Rural Marketing

Rural Visit

PGDM-RMM(2009-2011)

Submitted by :

Ashish Sonawane 29

Shubhangi Chouhan 61

Kulvinder Pathania 27

Prateek Chhabra 16

Amit Rai 10

Gaurav Chouhan 57


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Ice Fili case studyReaction paper

Case Overview

The Ice-Fili Public Limited Company is one of the oldest ice-cream producers in Russia. It is one of

Russia's most famous and admired companies, both because of its entrepreneurial success and socially

progressive vision. In its present form, it was incorporated on the basis of Frozen Products Plant No. 8,

which was set up 65 years ago with support from Anastas Mikoyan, a popular and influential political

figure. The company products are loved by children and adults alike.The company's high-quality ice-

creams earned it a place in the list of Russia's 100 Best Products. It has won a Moscow Badge of

Excellence in 1999 and 2000, was awarded the national Product of the Year prize.

Ice-Fili Strategy

Ice-Fili's pursues a strategy of product differentiation, focusing both on high quality, experimental

flavors and product lines, and most importantly, an innovative branding methodology that combines

traditional business goals with a progressive social agenda to form a truly unique and attractive

product offering.

Ice-Fili's products fall within the highest subset of super-premium ice-cream. Ice-Fili's further focuses

on quality by using only the finest ingredients that include natural dairy products and pure additivessuch as organic fruits.

An additional source of differentiation has come from the company's reputation as a business truly

committed to social betterment, pursued both at the direct corporate level. Ice-Fili is a longstanding

supplier for the Federal President's Administration and Federal Government, Moscow's City Hall, and

diplomatic missions; it assists the Society of the Disabled, children's homes and orphanages, and was

involved in the restoration of the Cathedral of Christ the Savior.

Ice-Fili Challenges

Ice-Fili faces growth pressures on a number of fronts.

o Highly competitive premium ice-cream marketo Grow its sales simply to maintain its share of this growing market.o Increase shareholder valueo Finding new retain revenueso Product Differentiations


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o Manage in a competitive market economy

Major issues

o Industry market of $500 million of which Ice Fili has only $25 milliono lack proper research and developmento inefficient distribution systemo absence of an efficient & experienced management team

Plan A

Ice-Fili has competency in their production process. With a well developed and implemented

marketing plan Ice-Fili could gain significant ground on Nestle, possibly without changing any of the

other value chain activities. They already have a great tasting all natural ice cream. It just needs a little

help in the form of marketing.

In the past Ice-Fili has spent only one percent of total sales on marketing, a small increase to two or

three percent is all that would be needed to give their sales a boost. The plan involves enhancing

current marketing techniques by focusing on what Ice-Fili does best. No other ice cream company in

Russia has as rich a heritage and as pure a product as Ice-Fili. This needs to be brought to the publics

attention. This can be accomplished simply by adding a slogan to every package of Ice-Fili brand ice

cream. The slogan should be one that addresses all of Ice-Filis unique qualities. Ice-Filis ice cream is

made with all natural ingredients and is high in fat. This makes the ice cream rich and gives it a great

taste. Russians have been bombarded with all types of new ice creams in recent years. The new ice

creams are loaded with additives and preservatives, which take away from the taste. Russians need to

be reminded of the rich taste of Ice-Filis products. The slogan accomplishes this nicely.

Hopefully this new approach will help Ice-Fili gain a greater market share paving the way for new

improvements to the value chain activities. If the campaign works Ice-Fili can use its renewed

popularity to better its distribution channel. Right now Ice-Fili has little control over their products in

the market place. Gaining a greater market share would allow Ice-Fili the opportunity to integrate

forward and sell their products directly to customers. They could maybe even compete with Baskin-

Robbins and Ben and Jerrys in the franchised restaurant business. Franchising is relatively cheap for

the franchisor and is a definite possibility for Ice-Fili in the future.

Plan B

Consolidation is the first strategy that can be suggested because of the stage the ice cream market is

currently in. As mentioned before, there are over 300 companies in this industry and one can easily

draw parallels to situations in the United States where many small businesses were eventually

consolidated into large chains such as McDonalds, Wendys, or Staples and Office Depot, etc. In fact,


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the industry in Russia has already taken a small step in that direction with the creation of the 32

member Association of Russian Ice Cream Producers in 1998. One of their primary goals was to form a

joint marketing campaign where their products would be marketed under one brand name and logo.

However, with so many companies competing for the same markets, some companies would hard

pressed to close down their production facilities due to redundancies for the good of the industry.Also, with the lack of a dominant player with a large amount of capital, it would be difficult for one

company to begin buying other companies and gain significant portions of market share in such a

fragmented industry.

The joint venture is second on the list because it would still allow Ice-Fili to make some decisions

autonomously. This would be a beneficial compromise because Ice-Fili could gain the marketing,

research and development, and managerial expertise while the foreign company can gain a low cost

entrance to the Russian market and Ice-Filis catalog of flavors and products. However, this strategy

has its negatives as well. For one, attracting a foreign investor may be difficult. The current political

climate of Russia is unstable and uncertain, two characteristics that companies do not like. Also, Ice-Fili

has several deficiencies that would make the joint venture difficult and expensive. Namely their lack of

an efficient distribution system and managerial expertise, two of the reasons why Ben & Jerrys exited

the Russian market in 1997 after five years.

The final and most drastic strategy is to be bought out. With so many deficiencies, a lack of capital, and

a lack of a large market share, perhaps the future of the company would be best left in the hands of

another company that can truly invest the capital and expertise needed to make Ice-Fili a long term

success. In fact, it would be better to be bought out now while the company still has a dominant

position in the market as small as that position is. With their return on assets, return on equity, and net

income all decreasing for six years straight, Ice-Fili is becoming a less attractive purchase by the year.

However, it can still be an attractive purchase for a foreign or domestic investment group as well as a

company looking to expand its production capabilities and products either domestically or

internationally. On the other hand, it is also a beneficial strategy to management because Ice-Fili can

still command a good price and many of its workers could keep their jobs because much of the work

done at Ice-Fili is production which is one of the top reasons to buy the company.

Recommended Strategy

The company has too many weaknesses to improve upon and limited capital and managerial resources

to with which to create and implement an alternative strategy such as Plan A, outlined in this paper. As

mentioned earlier, I feel the companys future would be most secure if it was in the hands of another

company or investment group that could invest the capital and knowledge that this company needs

and deserves in order to survive and thrive.


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ice-fili roll no. 29

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